The article identifies the main institutional constraints that hinder the realization of the potential of entrepreneurship in the regions of the Republic of Belarus, among which are: the lack of a property component of enterprises; restrictions associated with obtaining credit funds; relatively high entry costs for start-up SMEs; lack of personnel; problems related to the promotion of goods and products (including services); insufficient attention on the part of local self-government bodies of the Republic to the development of entrepreneurship. Based on the analysis, the authors proposed a scheme for the formation of the business environment for entrepreneurship in the Republic of Bashkortostan.